Critical Review: Cloudflare (NYSE:NET) vs. Allbirds (NASDAQ:BIRD)

Allbirds (NASDAQ:BIRD) and Cloudflare (NYSE:NET) are both technology companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, earnings, risk and profitability.

Insider & Institutional Ownership

44.1% of Allbirds shares are held by institutional investors. Comparatively, 82.7% of Cloudflare shares are held by institutional investors. 18.8% of Allbirds shares are held by insiders. Comparatively, 10.7% of Cloudflare shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Allbirds and Cloudflare’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Allbirds	-72.82%	-231.86%	-81.53%
Cloudflare	-8.21%	-3.88%	-0.94%

Volatility & Risk

Allbirds has a beta of 2.62, suggesting that its stock price is 162% more volatile than the S&P 500. Comparatively, Cloudflare has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Allbirds and Cloudflare, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allbirds	1	1	0	0	1.50
Cloudflare	4	7	21	1	2.58

Cloudflare has a consensus price target of $321.85, suggesting a potential downside of 0.41%. Given Cloudflare’s stronger consensus rating and higher possible upside, analysts clearly believe Cloudflare is more favorable than Allbirds.

Earnings and Valuation

This table compares Allbirds and Cloudflare”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Allbirds	$155.22 million	0.13	-$77.28 million	($8.99)	-0.26
Cloudflare	$2.51 billion	45.47	-$102.27 million	($0.58)	-557.21

Allbirds has higher earnings, but lower revenue than Cloudflare. Cloudflare is trading at a lower price-to-earnings ratio than Allbirds, indicating that it is currently the more affordable of the two stocks.

Summary

Cloudflare beats Allbirds on 11 of the 15 factors compared between the two stocks.

About Allbirds

Allbirds, Inc. manufactures and sells footwear and apparel products for men and women in the United States and internationally. The company offers a range of lifestyle and performance shoes; and apparel, including classic tees and sweats, socks, and underwear. It sells its products through its retail stores, as well as online. The company was formerly known as Bozz, Inc. and changed its name to Allbirds, Inc. in December 2015. Allbirds, Inc. was incorporated in 2015 and is headquartered in San Francisco, California.

About Cloudflare

Cloudflare, Inc. operates as a cloud services provider that delivers a range of services to businesses worldwide. The company provides an integrated cloud-based security solution to secure a range of combination of platforms, including public cloud, private cloud, on-premise, software-as-a-service applications, and IoT devices; and website and application security products comprising web application firewall, bot management, distributed denial of service, API gateways, SSL/TLS encryption, script management, security center, and rate limiting products. It offers website and application performance solutions, including content delivery, load balancing, DNS, agro smart routing, video stream delivery, web optimization, cache reserve, cloudfare waiting room, and cloudfare data localization suite; SASE platform through cloudfare one that provides a cloud-based network-as-a-service; network services which deliver network connectivity, security, and performance, including magic WAN, magic transit, magic firewall, cloudflare network interconnect, and spectrum. In addition, the company provides zero trust services, such as cloudflare access, cloudflare gateway, remote browser isolation, cloud access security broker, cloud email security, and data loss prevention products that protects, inspects, and provides privilege rules to grant access to data and application. Further, it provides developer-based solutions consisting of cloudflare workers, R2 object storage, workers KV, durable objects, cloudfare pages, cloudfare stream, and cloudfare images; and consumer products comprising of 1.1.1.1, a DNS resolver, WARP, a virtual private network, and cloudfare registrar that secures registration and management of domain names. The company serves customers in the technology, healthcare, financial services, consumer and retail, industrial, and non-profit industries, as well as government. Cloudflare, Inc. was incorporated in 2009 and is headquartered in San Francisco, California.